Trump 2.0 Energy Policies May Provide Opportunities for Chinese Firms, Experts Say

[para. 1] In the context of Donald Trump's potential second-term presidency, there is an anticipated focus on balancing traditional energy support with openness to renewables, potentially fostering increased U.S.-China energy cooperation. This approach may pave the way for Chinese solar investments in the U.S., according to experts at an energy summit.

[para. 2] Despite economic tensions between the U.S. and China, cooperation in the energy sector remains solid, largely due to the lack of significant conflicts in the traditional energy sphere. Tu Xinquan from the China Institute for WTO Studies emphasized this at the 2024 International Energy Development Summit Forum.

[para. 3] President Joe Biden's energy policy primarily targets mitigating climate change, with a strong emphasis on renewable energy and rejoining the Paris Agreement, which the U.S. left under Trump's first term. Biden's administration actively pursues carbon neutrality by 2050, focusing on EVs, solar power advances, and reducing fossil fuel use.

[para. 4] During Trump's first term, his policies prioritized energy independence by aggressively backing fossil fuels. This included rolling back environmental regulations, facilitating oil and gas drilling, expanding gas exports, and withdrawing from the Paris Agreement. Energy was used as a strategic tool for economic growth, competitiveness, and security.

[para. 5] Trump's anticipated second-term policy is expected to continue supporting traditional fuels while showing some openness to renewable initiatives, as long as they promote job creation and economic growth according to Chen Wenxin from the China Institutes of Contemporary International Relations.

[para. 6] On the campaign trail, Trump promised to expand oil and gas drilling and increase LNG exports, with personnel choices indicating a possible friendly stance toward renewable energy.

[para. 7] Daniel Yergin of S&P Global suggested that Trump's administration might leverage energy exports to balance U.S.-China economic relations. He sees crude oil and LNG trade as potential strongholds of bilateral cooperation, highlighting the growing global demand for LNG due to its flexibility.

[para. 8] The U.S. aims to increase LNG and crude oil sales to China, aligning these actions with economic interests. This move capitalizes on the shale revolution, which positions the U.S. as a leading global producer of oil and LNG.

[para. 9] The U.S.'s transformation into a net energy exporter due to the shale revolution significantly impacts domestic and foreign policies, focusing more on job opportunities which traditional energy sectors offer versus renewables.

[para. 10] However, Trump's renewable energy policies could vary by sector. Specifically, the EV sector is likely to maintain protectionist policies because of competition from China and data security concerns related to EVs.

[para. 11] Conversely, the solar sector may experience less tension. Chinese solar investments do not significantly threaten traditional U.S. industries and can contribute to job creation through direct investment.

[para. 12] Many Chinese manufacturers have adapted to protective U.S. measures by localizing production or adjusting supply chains to sidestep tariff challenges. This includes significant investments in U.S. solar manufacturing facilities by companies like Longi and Trina.

[para. 13] Despite these initiatives, uncertainties remain, as U.S. senators have proposed legislation that could impede Chinese PV companies from obtaining subsidies under the Inflation Reduction Act.

[para. 14] Niu Xinchun, from the China-Arab Research Institute, remarked on the complexity of U.S.-China ties and suggested that Chinese companies should adopt a cautious approach, frequently reassessing political and security landscapes to guide their U.S. investments.